‘O Presidente’ in his ‘state of the union’ vanity show address yesterday unveiled among other things the European Commission’s proposal for a ‘Tobin Tax‘ or officially a Financial Transactions Tax (FTT). It would fall on monetary and financial institutions (MFIs), banks to ordinary people. It would apply to inter-MFI transactions within the EU and between EU MFIs and third country MFIs. In the commission’s own words,

The financial sector was a major cause of the crisis and received substantial government support over the past few years. To ensure that the sector makes a fair contribution to public finances and for the benefit of citizens, enterprises and Member States, the European Commission on 28 September put forward a proposal for a financial transaction tax (FTT).

So:

Through the FTT, the financial sector will properly participate in the cost of re-building Europe’s economies and bolstering public finances. The proposed tax will generate significant revenues and help to ensure greater stability of financial markets, without posing undue risk to EU competitiveness.